Official invoice from Paypal for its fees?

3 replies
Hello fellow warriors!


I have a PayPal business account (in the European Union) and need to account for my PayPal seller fees on my tax return.



PayPal fees are a business expense, so I should be able to print an official invoice from PayPal stating this.


I don't see such an option in my account.


I can export a PDF under:


Reports ==> Statements


In that PDF, it shows the fees Paypal has charged.


BUT, at the bottom of each page it says:


"This account statement is not an invoice within the meaning of the EU VAT Directive 2006/112/EC. PayPal's services are in scope of the
exemption from VAT for financial services. This statement may serve as a receipt for accounting and tax related purposes."



So, this PDF cannot be used as an invoice (not to be confused with a receipt).


An official invoice would have Paypal's VAT id in it.


So, how do all you Europe-based businesses declare this as an expense?


Thanks in advance!
#fees #invoice #official #paypal
  • Profile picture of the author Frank Donovan
    You don't see a PayPal VAT number because PayPal charges are VAT exempt, like bank charges - so there's no VAT to reclaim.

    What PayPal charges you can offset against your tax liabilities is a question you need to raise with your accountant. It's not something anyone on a public forum can advise you on.
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  • Profile picture of the author perneali45
    Thanks for the reply, Frank! :-)



    I'm not looking to reclaim the VAT itself - but the main charge.


    Example:


    "Business 1" pays "Business 2" for a service they provided. Let's say $1,000 + VAT for consulting.


    "Business 1" should be able to reclaim all of that ($1,000 + VAT) as an expense.


    If Paypal doesn't charge VAT, that's fine. But what about the rest of the charge ($1,000) or whatever?



    At least in my country, banks do give a statement for transaction fees. For example, if they provide a POS card terminal and withhold a percentage of every sale that goes through that system, then all those charges can be tallied up at the end of the month, and claimed as a business expense (which it is of course).


    Any thoughts on this?


    Thanks!
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    • Profile picture of the author Frank Donovan
      Originally Posted by perneali45 View Post

      At least in my country, banks do give a statement for transaction fees. For example, if they provide a POS card terminal and withhold a percentage of every sale that goes through that system, then all those charges can be tallied up at the end of the month, and claimed as a business expense (which it is of course).


      Any thoughts on this?
      You've already received a statement from PayPal which "may serve as a receipt for accounting and tax related purposes". All you seem concerned about is the lack of a VAT number, but not every business expense that can be offset against tax will contain a VAT element. For most tax returns, receipts are just as valid as invoices.

      Again, we don't know your business or your circumstances. You should take this up with your accountant.

      Good luck.
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